91-9711165183
February 12, 2026
Personal loans are unsecured credit extended to customers for personal use and repaid within a fixed term. To keep the default ratio low, banks allocate funds to applicants who meet the eligibility criteria and have a history of meeting their financial obligations on time.
The CIBIL (Credit Bureau of India Limited) records and maintains credit transactions of individuals and issues them a score based on their Creditworthiness. Banks and NBFIs check CIBIL before extending further credit. They refer to CIBIL to verify the following:
Further Loan amounts are issued to the applicant based on the existing dues and financial eligibility to pay the additional EMI.
A 0 or -1 CIBIL score indicates that you have either not availed of credit or do not have sufficient credit history. You can apply for an HDFC Bank Personal Loan or an ICICI Bank Personal Loan.
The HDFC Bank eligibility criteria for applicants with a 0 or -1 CIBIL include the following:
The eligibility criteria required for an ICICI Bank personal loan with a 0 or a -1 CIBIL score:
A CIBIL score of 750+ is considered healthy and should make the applicant eligible for a personal loan. Below are instances when a personal loan can be rejected despite a good score.
Customer is overleveraged: An applicant is considered overleveraged if:
The CIBIL score may not be affected if dues are paid on time, but the request for additional funds may be denied.
The employer is not approved: The company a customer is employed with forms an essential part of personal loan eligibility.
Verification is negative: Customer verification is an essential part of the KYC regulations for issuing credit. Lenders perform a Video KYC and, if required, a physical verification at the applicant’s residence or office to verify the authenticity of the information submitted.
If verification is not completed, the Personal Loan request is denied, even if the applicant’s CIBIL score is above the required benchmark.
Incomplete Documents: A personal loan is a collateral-free loan; it is processed based on the customer’s profile and the documents submitted, such as proof of income and KYC documents. A good CIBIL score will ensure personal loan eligibility, but if the required documents are incomplete or unavailable, the personal loan request will not be processed further.
Private Banks offer personal loans as short-term funding with reasonable interest rates. As personal loans are offered without collateral, keeping the default ratio low is a challenge for most private Banks. CIBIL history and records help identify customers with higher CIBIL scores and a smooth repayment history. Although banks require a CIBIL score of 720+, each case is assessed on its own merits.
NBFCs (Non-Banking Finance Companies) are similar to Banks, as they are also licensed to provide secured and unsecured credit in the form of loans. Banks and NBFCs set their own eligibility criteria and lending terms.
NBFCs that offer personal loans actively are:
NBFCs also require a CIBIL score above 700 and do not issue personal loans to applicants without a credit history. If you have a low CIBIL score, NBFCs do give some allowances, as compared to banks, based on the following:
Overleveraged Customer: If you are currently running 6 to 7 loans and your existing EMI exceeds the permitted income-to-EMI ratio, a Bank will decline your personal loan request as overleveraged. Whereas with NBFCs, you can transfer the principal balance of your existing personal loans to an NBFC. With a balance transfer, your EMI will decrease, reducing an excessive financial burden and increasing your eligibility for the required personal loan amount.
CIBIL inquiries: Each time a customer applies for credit, the lender forwards an inquiry to CIBIL to check their existing CIBIL score, credit history, and credit lines. These inquiries will appear in your record, indicating the number of applications you have forwarded for a loan or credit card. Lenders view too many CIBIL inquiries as a warning that the customer is credit hungry, planning to apply for credit from multiple lenders simultaneously. Banks do not process a personal loan application if there are more than 3 credit inquiries on CIBIL in the past 3 months. Still, NBFCS accepts 6 to 8 inquiries, allowing the applicant to apply.
Application Score: is a value assigned to the customer’s details in the personal loan application form. NBFCS, such as SMFG Finance, use an Apps score before processing a personal loan application. If the customer details score above the required benchmark, the application proceeds; if it does not, it is declined. If the customer’s CIBIL score is low but the Apps score generated from other information is sufficient, the customer may still be eligible for a personal loan despite the low CIBIL score.
